Category Archives: Boards

Words that Need to Go away: Leverage

Leverage,* noun 1. the exertion of force by means of a lever or an object used in the manner of a lever. 2. the ratio of a company’s loan capital (debt) to the value of its common stock (equity). 3. A television show on FX starring Timothy Hutton. Verb 1. use borrowed capital for (an investment), expecting the profits made to be greater than the interest payable. 2. use (something) to maximum advantage. (Definition courtesy of Wikipedia except for the bit about Timothy Hutton.)

*In full disclosure, I hate the word “leverage” with the white-hot passion of a thousand suns, and I have not seen a single episode of Leverage the TV show. Now that’s off  my chest, let’s proceed.

Take a minute to absorb these definitions. One refers to a basic type of machine that we all learned about in fourth grade science class. A lever is something cave people used to move rocks up a hill. It’s something the bad guys pull in action movies to blow up buildings. Not a great metaphor for nonprofits, folks.

Two of these five definitions refer to money, specifically turning money into more money. While business rhetoric sometimes helps us think through aspects of nonprofits, we should resist borrowing buzz words from the business world just because we think they sound impressive. (Do not get me started on all the “synergizing” of the mid-2000s. It still turns my stomach.)

So, this just leaves the fourth definition: “use (something) to maximum advantage.” Ok. So, that’s not horrible. It’s just really, really vague and un-creative. Why use one word to describe virtually every type of relationship possible in nonprofits? A social media presence is being leveraged for neighborhood buy-in. Neighborhood buy-in is leveraging volunteer hours. Volunteer hours are being leveraged for Federal grants. Federal grants are being leveraged for corporate sponsorships. Corporate sponsorships are being leveraged for individual donations. And so on to infinity until the snake eats its own tail.

I do not understand what “leverage” means half the time. When I see this word, I automatically assume that the author just did not have time to properly articulate the relationship between X and Y. I roll my eyes as far as they will go back in my head and ask: How are the two things you said actually related? Has a foundation said that they will give you a $10,000 grant if you raise $5,000 in private donations? Then say that. Are you applying for a large Federal grant and you want to show that you have a lot of neighborhood support by the number of “likes” on your Facebook page? Then say that. Are you trying to show new clients that people like them are using your services? Then say that!

The only time I want to hear the word “leverage” again is if someone is telling me that I should binge watch the TV show. Speaking of which, is it any good?

Money Talk: How to Pay People More without More Money

Photo: Mandy Jansen

Photo: Mandy Jansen

While I am quick to criticize the low salaries found in nonprofits, I realize that sometimes we simply cannot get blood from turnips. Boards and executive directors may want nothing more than to reward their dedicated and hard-working staffs but do not have the money. What then? How do we keep motivating employees without paying them more? How do we show them how important they are without a pay increase?

My answer: lots of ways. Not having money in the budget is not the time to throw our hands in the air and walk away. It is the time to roll up our sleeves, think creatively, and find other ways to appreciate employees.

Paid time off. I know, nonprofits tend to be understaffed and having someone out on vacation can throw a monkey wrench into everyone else’s week. But offering more paid time off is an easy and cheap way to reward and motivate employees. This could be vacation days or mid-week mental health days. Suggest a morning off each week or close early on Fridays if you are unable to make financial pay increase.

Flexible work schedule. For many nonprofit employees, a flexible work schedule is a major advantage. In fact, it may be part of the reason they are drawn to work in a nonprofit in the first place. They value the flexibility to come in late, leave early, go to a doctor’s appointment, and pick up children from school. They also value being trusted to get their job done, even if it is outside typical work hours. Recognize and highlight this benefit to employees.

Delay the salary increase. Things are really tight right now. Maybe a big grant has not come in or you are waiting to hear back from a funder. Ask everyone to delay salary increases by three months if that will buy some time. Employees appreciate honesty and straightforwardness. The opacity of power can be more frustrating than the resulting decisions. Maybe show them the budget and explain what is going on. Let them know that you are not taking a salary increase either. It goes without saying that you should always, always make good on these promises.

Do something. If none of these options will work, do not let good work go unrecognized. Write a letter to them and keep a copy in their personnel file. Take them to lunch. Publicly commend them at a board meeting.Acknowledge that under other circumstances, their performance would be rewarded in more tangible ways.

The thing to keep in mind is that different non-monetary benefits appeal to different employees. Perhaps presenting them with a few options and allowing them to choose would generate goodwill.

Money Talk: Introduction

Two of my basic beliefs in this life are: 1) everyone should be paid fairly and appropriately for the work that they do and 2) everyone should be able to work 40-ish hours a week and live comfortably. These are not new ideas. Working class Americans spent the better part of the last century fighting for livable wages and humane working conditions. This month, the Senate is voting ontwo executive measures that would address the seemingly intractable pay gap between men and women.

And yet any talk of fair pay, equal pay, and livable pay in nonprofits can elicit strong and sometimes visceral reactions. At a conference recently, I was presenting a paper on nonprofit compensation that encouraged employers who cannot afford to increase employee pay to explore non-monetary forms of compensation, e.g. a flexible schedule, greater influence in decision-making, or more time off. An audience member asked: “Do you think paying nonprofit employees more would diminish their commitment to their jobs?” In other words, will paying employees well encumber the altruistic spirit of nonprofit work? Will they become selfish and money-hungry?

Liz West

Liz West

I understand where these questions originate, even if I find them reprehensible. One, nonprofit work can provide ephemeral rewards that substitute for tangible (monetary) pay. So is the concern here that if nonprofit employees were paid their full monetary value, they would lose their drive for intangible rewards? Show me the data, and we can talk. Otherwise, this causality is speculative and unproven, which makes it dangerous to apply to human life.

I will concede the second argument I have heard: nonprofits and their employees do not have a natural immunity to the corruptible power of money. Corporate America does not have a monopoly on greed. In fact, breezing through 990s online reveals that nonprofits can be just as guilty as corporations of grotesquely overpaying executive directors while front-line employees barely live above the poverty level. But I am far from suggesting here that we uncritically pump money into nonprofits until they become bloated slugs of fiscal excess.

William Warby

William Warby

Rather, I am challenging the notion that employees’ well-being and the organization’s well-being are at odds with one another. They are two halves of the same coin. Personal financial stability can lead to increased motivation and job performance. Getting paid fairly can make employees feel valued and secure. Retaining employees leads to better quality programming, enhances institutional knowledge and history, and is an overall indicator of good organizational health.

For example, my research found that one of the most disruptive activities to nonprofit labor process is what I call processual quitting: the act of searching for jobs, polishing a resume, practicing for the GRE, et cetera. Processual quitting ate up chunks of employees’ time and energy at work and at home. The process of walking to the edge of quitting, usually without actually quitting, restored a sense of power and control to employees who otherwise felt helpless to change their situations. Processual quitting was so common because employees lacked the tools to ask for better pay, more benefits, influence in organizational direction, or whatever their situation lacked.

This special segment I call “Money Talk” has two audiences: supervisors – executive directors, funders, boards – who should consider the real, human consequences of low salaries, especially over time (for employees and organizations); and employees who should view self-advocacy not as greedy or selfish but consistent with and supportive of their love and passion for the organization and its mission.